Yahoo! used their recent Ad Forum in Sunnyvale, CA to unveil some new (and old) search products they have been testing. Some of these products definitely show Yahoo!’s new focus on transparency and control.

Without further delay, here are some of the products and features that were announced:

Y!our Ads

Definition: Yahoo! is using their Behavioral Targeting models to match ads with users’ past search queries. For example, if you search for “flowers” on Yahoo!, come back and search for “how to tie a tie,” then Yahoo! can potentially serve you flower ads. Ads will only be shown with Y!our Ads if the advertiser is opted into Yahoo! Content Match.

Comments: Yahoo! has said they will only show ads for categories that convert based on their data. It will be interesting to see how successful this product is with relevancy and the “creepy” factor. Re-targeting has been known to walk on the “creepy” line with passive users, but this product is right in the face of hand-raising, active search users.

Timing: Testing Q4 2009, but it should be released in Q1 2010

Network Distribution

Definition: This setting will allow advertisers to bid separately or opt out of Yahoo! vs. partner traffic.

Comments: This will be available through Yahoo!’s API for technology partners. This is a huge win for advertisers who see a large difference in performance between Yahoo! specific traffic and partner traffic.

Timing: Q1 2010 in the US

Ad Delivery Report

Definition: This report will allow advertisers to see how their ads are performing on various partner sites.

Comments: For professional search marketers, this is a huge win for Yahoo! This is comparable to the Google Placement Report except for search (not content network). This is actionable data when paired with Network Distribution (listed above) and Domain Blocking. A common use case will be to block underperforming domains. The dream here is to capitalize on performing partners with individual CPCs at the keyword+partner level.

Timing: Definite release not disclosed

Rich Ads in Search (RAIS)

Definition: New SEM ad format that takes up a large piece of SERP real estate with images, videos, and multiple links.[1]

Comments: This is a great experiment by Yahoo! One barrier to entry here is the $15K minimum to test the product.

Timing: Currently live

Yahoo! Search Marketing Desktop Beta

Definition: Similar to other engine desktop tools. The tool helps advertisers manage search engine marketing campaigns more efficiently through a desktop application that posts to online advertising accounts.

Comments: Yahoo!’s tool is still in beta. There are some advantages and disadvantages of Yahoo!’s tool as compared to other engines’ tools. I believe Yahoo! is moving in the right direction. With the Yahoo!/Microsoft merger, it will be interesting to see what the resulting desktop tool will look like long term.

Timing: Currently live in beta

With these products and features, Yahoo! is definitely making an investment in search engine marketing. Search marketers everywhere are holding their collective breath to hear the plans for the Yahoo!/Microsoft agreement. What we do know about the partnership:

Microsoft will be spearheading the engineering for the search algorithm and SEM interface.

Yahoo! will be handling sales and support.

Search is the only thing that will transition (display is not part of the deal).

Timing is still up in the air, but the earliest transition would be Q3 2010.

The whole deal is subject to regulatory approval.

With a larger Microsoft engineering force expected to deliver on innovation, Yahoo! has changed to an offensive strategy in search. If, and only if, Yahoo! and Microsoft do this right, then these product features (and future features) will mean a legitimate 2nd option to Google in search advertising. SEM agencies and individual advertisers alike may need to diversify even more than they are today. Those staying informed about this partnership and about Yahoo! products will be better equipped to capitalize on any market share shifts that result from this product innovation.